Information Systems Controls For System Reliability

CHAPTER 8
Information Systems Controls for System Reliability Part 2: Confidentiality, Privacy, Processing Integrity, and Availability
INTRODUCTION
Questions to be addressed in this chapter include:
What controls are used to protect the confidentiality of sensitive information? What controls are designed to protect privacy of customers personal information? What controls ensure processing integrity? What controls ensure that the system is available when needed?
INTRODUCTION
SYSTEMS RELIABILITY PROCESSING INTEGRITY CONFIDENTIALITY
According to the Trust Services framework, reliable systems satisfy five principles:
Security (discussed in Chapter 7) Confidentiality Privacy Processing integrity Availability
AVAILABILITY
SECURITY
PRIVACY
CONFIDENTIALITY
SECURITY
AVAILABILITY
y Reliable systems protect confidential information from unauthorized disclosure.
PRIVACY
CONFIDENTIALITY
Maintaining confidentiality requires that management identify which information is confidential. Confidential information includes sensitive data produced internally as well as that shared by business partners. Each organization will develop its own definitions. Most definitions will include:
Business plans Pricing strategies Client and customer lists Legal documents
CONFIDENTIALITY
y Table 8-1 in your textbook summaries key controls to protect confidentiality of information:
Situation Storage Transmission Disposal Overall Controls Encryption and access controls Encryption Shredding, thorough erasure, physical destruction Categorization to reflect value and training in proper work practices
CONFIDENTIALITY
Encryption is a fundamental control procedure for protecting the confidentiality of sensitive information. Confidential information should be encrypted:
While stored During transmission to trusted parties
CONFIDENTIALITY
The internet provides inexpensive transmission, but data is easily intercepted. Encryption solves the interception issue. If data is encrypted before sending it, a virtual private network (VPN) is created.
Provides the functionality of a privately owned network But uses the Internet
CONFIDENTIALITY
Use of VPN software creates private communication channels, often referred to as tunnels.
The tunnels are accessible only to parties who have the appropriate encryption and decryption keys. Cost of the VPN software is much less than costs of leasing or buying a privately-owned, secure communications network. Also, makes it much easier to add or remove sites from the network.
CONFIDENTIALITY
It is critical to encrypt any sensitive information stored in devices that are easily lost or stolen, such as laptops, PDAs, cell phones, and other portable devices.
Many organizations have policies against storing sensitive information on these devices. 81% of users admit they do so anyway.
CONFIDENTIALITY
Encryption alone is not sufficient to protect confidentiality. Given enough time, many encryption schemes can be broken. Access controls are also needed:
To prevent unauthorized parties from obtaining the encrypted data; and Because not all confidential information can be encrypted in storage.
Strong authentication techniques are necessary. Strong authorization controls should be used to limit the actions (read, write, change, delete, copy, etc.) that authorized users can perform when accessing confidential information.
CONFIDENTIALITY
Access to system outputs should also be controlled:
Do not allow visitors to roam through buildings unsupervised. Require employees to log out of any application before leaving their workstation unattended, so other employees do not have unauthorized access. Workstations should use password-protected screen savers that automatically engage when there is no activity for a specified period. Access should be restricted to rooms housing printers and fax machines. Reports should be coded to reflect the importance of the information therein, and employees should be trained not to leave reports with sensitive information laying in plain view.
CONFIDENTIALITY
It is especially important to control disposal of information resources. Printed reports and microfilm with sensitive information should be shredded.
CONFIDENTIALITY
Special procedures are needed for information stored on magnet and optical media.
Using built-in operating system commands to delete the information does not truly delete it, and utility programs will often be able to recover these files. De-fragmenting a disk may actually create multiple copies of a deleted document. Consequently, special software should be used to wipe the media clean by repeatedly overwriting the disk with random patterns of data (sometimes referred to as shredding a disk). Magnetic disks and tapes can be run through devices to demagnetize them. The safest alternative may be to physically destroy disks with highly sensitive data.
CONFIDENTIALITY
Controls to protect confidentiality must be continuously reviewed and modified to respond to new threats created by technological advances. Many organizations now prohibit visitors from using cell phones while touring their facilities because of the threat caused by cameras in these phones. Because these devices are easy to hide, some organizations use jamming devices to deactivate their imaging systems while on company premises.
CONFIDENTIALITY
Phone conversations have also been affected by technology. The use of voice-over-the-Internet (VoIP) technology means that phone conversations are routed in packets over the Internet.
Because this technology makes wiretapping much easier, these packets should be encrypted.
CONFIDENTIALITY
Employee use of email and instant messaging (IM) probably represents two of the greatest threats to the confidentiality of sensitive information.
Once sent, there is no way to retrieve or control its distribution. Organizations need to develop comprehensive policies governing the appropriate and allowable use of these technologies for business purposes. Employees need to be trained on what type of information they can and cannot share, especially with IM.
CONFIDENTIALITY
Many organizations are taking steps to address the confidentiality threats created by email and IM.
One response is to mandate encryption of all email with sensitive information. Some organizations prohibit use of freeware IM products and purchase commercial products with security features, including encryption. Users sending emails must be trained to be very careful about the identity of their addressee.
EXAMPLE: The organization may have two employees named Allen Smith. It s critical that sensitive information go to the correct Allen Smith.
PRIVACY
In the Trust Services framework, the privacy principle is closely related to the confidentiality principle. Primary difference is that privacy focuses on protecting personal information about customers rather than organizational data. Key controls for privacy are the same that were previously listed for confidentiality.
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AVAILABILITY
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PRIVACY
A number of regulations, including the Health Insurance Portability and Accountability Act (HIPAA) and the Financial Services Modernization Act (aka, Gramm-Leach-Billey Act) require organizations to protect the privacy of customer information.
PRIVACY
The Trust Services privacy framework of the AICPA and CICA lists ten internationally recognized best practices for protecting the privacy of customers personal information:
Management The organization establishes a set of procedures and policies for protecting privacy of personal information it collects. Assigns responsibility and accountability for those policies to a specific person or group.
PRIVACY
Management Notice Provides notice about its policies and practices when it collects the information or as soon as practicable thereafter.
Describes the choices available to individuals and obtains their consent to the collection and use of their personal information. Choices may differ across CICA The Trust Services privacy framework of the AICPA andcountries. U.S.The default for lists ten internationally recognized best practices is opt out, i.e., organizations can collect personal protecting the privacy of customers personal information: information about customers Management unless the customer explicitly objects. Notice EuropeThe default is opt in, Choice and consent i.e., they cant collect the information unless customers explicitly give them permission. Collection The organization collects only that information needed to fulfill the purposes stated in its privacy policies.
PRIVACY
PRIVACY
Management Notice Choice and consent Collection
The organization collects only that information needed to fulfill the purposes stated in its privacy policies.
PRIVACY
Management Notice Choice and consent Collection Use and retention The organization uses its customers personal information only according to stated policy and retains that information only as long as needed.
PRIVACY
Management Notice Choice and consent Collection Use and retention Access The organization provides individuals with the ability to access, review, correct, and delete the personal information stored about them.
PRIVACY
Management Notice Choice and consent The organization discloses customers personal information to third parties Collection only per stated policy and only to third Use and retention parties who provide equivalent Access protection. Disclosure to Third Parties
The organization takes reasonable steps to protect customers personal information from loss or unauthorized disclosure. Issues that are sometimes overlooked: Disposal of computer equipment Should follow the suggestions presented on section regarding The Trust Servicesconfidentiality. protection of privacy framework of the AICPA and CICA lists ten internationally recognized best practices for Email protecting send emailsof customers personal information: If you the privacy to a list of recipients, each recipient Management typically knows who the other recipients are. Notice email regards a private issue, e.g., perhaps it pertains to If the their AIDS treatment, then the privacy of all recipients has Choice and consent been violated. Collection One remedy might be to address the recipients on the bcc Use and retention line of the email, rather than as original addresses. Access Release of electronic documents. Disclosure to Third Parties When physical documents are exchanged, sometimes Security portions are blacked out (redacted) to protect privacy. Similar procedures are needed for the exchange of electronic documents.
PRIVACY
PRIVACY
Management Notice Choice and consent Collection Use and retention Access Disclosure to Third Parties Security The organization maintains the integrity of its customers personal Quality information.
PRIVACY
Management Notice The organization assigns one or more Choice and consent employees to be responsible for Collection assuring and verifying compliance Use and retention with its stated policies. Access Also provides for procedures to respond to customer complaints, Disclosure to Third Parties including third-party disputeSecurity resolution processes. Quality Monitoring and enforcement
PRIVACY
As with confidentiality, encryption and access controls are the two basic mechanisms for protecting consumers personal information.
It is common practice to use SSL to encrypt all personal information transmitted between individuals and the organization s website. However, SSL only protects the information in transit. Consequently, strong authentication controls are needed to restrict website visitors access to individual accounts.
PRIVACY
Organizations should consider encrypting customers personal information in storage.
May be economically justified, because some state laws require companies to notify all customers of security incidents. The notification process is costly but may be waived if the information was encrypted while in storage.
PRIVACY
Concerns about privacy appear to be increasing. One topic of concern is cookies.
A cookie is a text file created by a website and stored on a visitor s hard drive. It records what the visitor has done on the site. Most websites create multiple cookies per visit to make it easier for visitors to navigate the site. Browsers can be configured to refuse cookies, but it may make the website inaccessible. Cookies are text files and cannot do anything other store information, but many people worry that they violate privacy rights.
PRIVACY
A related concern involves the overwhelming volume of spam.
Spam is unsolicited email that contains either advertising or offensive content.
Reduces the efficiency benefits of email. Is a source of many viruses, worms, spyware, and other malicious content.
PRIVACY
In 2003, the U.S. Congress passed the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act.
Provides criminal and civil penalties for violation of the law. Applies to commercial email, which is any email with a primary purpose of advertising or promotion. Covers most legitimate email sent by organizations to customers, suppliers, or donors to non-profits.
PRIVACY
Consequently, organizations must carefully follow the CANSPAM guidelines, which include:
The sender s identity must be clearly displayed in the message header.
PRIVACY
The sender s identity must be clearly displayed in the message header. The subject field in the header must clearly identify the message as an advertisement or solicitation.
PRIVACY
The sender s identity must be clearly displayed in the message header. The subject field in the header must clearly identify the message as an advertisement or solicitation. The body must provide recipients with a working link that can be used to opt out of future email. Organizations have 10 days after receipt of an opt out request to ensure they do not send additional unsolicited email to that address. Means someone must be assigned responsibility for processing these requests.
PRIVACY
The sender s identity must be clearly displayed in the message header. The subject field in the header must clearly identify the message as an advertisement or solicitation. The body must provide recipients with a working link that can be used to opt out of future email. The body must include the sender s valid postal address. Best practice (not required) would be to provide full street address, telephone, and fax numbers.
PRIVACY
The sender s identity must be clearly displayed in the message header. The subject field in the header must clearly identify the message as an advertisement or solicitation. The body must provide recipients with a working link that can be used to opt out of future email. The body must include the sender s valid postal address. Organizations should not: Send email to randomly generated addresses. Set up websites designed to harvest email addresses of potential customers.
PRIVACY
Experts recommend that organizations redesign their own websites to include a visible means for visitors to opt in to receive email. The AICPA and CICA have developed a privacy framework that provides detailed information on how organizations can comply with CAN-SPAM and other domestic and international regulations.
PRIVACY
Organizations need to train employees on how to manage personal information collected from customers.
Especially important for medical and financial information. Intentional misuse or unauthorized disclosure can have serious economic consequences, including:
Drop in stock price Significant lawsuits Government suspension of the organization s business activity
PRIVACY
Another privacy-related issue that is of growing concern is identity theft.
Organizations have an ethical and moral obligation to implement controls to protect databases that contain their customers personal information.
PRIVACY
Steps that individuals can take to minimize the risk of becoming a victim of identity theft include:
Shred all documents that contain personal information, especially unsolicited credit card offers. Cross-cut shredders are more effective. Never send personally identifying information in unencrypted email. Beware of email, phone, and print requests to verify personal information that the requesting party should already possess. Credit card companies won t ask for your security code. The IRS won t email you for identifying information in response to an audit.
PRIVACY
Do not carry your social security card with you or comply with requests to reveal the last 4 digits. Limit the amount of identifying information preprinted on checks and consider eliminating it. Do not place outgoing mail with checks or personal information in your mailbox for pickup. Don t carry more than a few blank checks with you. Use special software to thoroughly clean any digital media before disposal, or physically destroy the media. It is especially important to thoroughly erase or destroy hard drives before donating or disposing of equipment.
PRIVACY
Monitor your credit reports regularly. File a police report as soon as you discover that your purse or wallet was stolen. Make photocopies of driver s licenses, passports, and credit cards. Store them with phone numbers for all the credit cards in a safe location to facilitate notifying authorities if they are stolen. Immediately cancel any lost or stolen credit cards.
PROCESSING INTEGRITY
A reliable system produces information that is accurate, timely, reflects results of only authorized transactions, and includes outcomes of all activities engaged in by the organization during a given period of time. Requires controls over both data input quality and the processing of the data.
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Five categories of integrity controls are designed to meet the preceding objectives:
Source data controls Data entry controls Processing controls Data transmission controls Output controls
Source Data Controls
If the data entered into a system is inaccurate or incomplete, the output will be, too. (Garbage in garbage out.) Companies must establish control procedures to ensure that all source documents are authorized, accurate, complete, properly accounted for, and entered into the system or sent to their intended destination in a timely manner.
The following source data controls regulate integrity of input:
Forms design
Source documents and other forms should be designed to help ensure that errors and omissions are minimized (Chapter 18).
Forms design Pre-numbered forms sequence test
Pre-numbering helps verify that no items are missing. When sequentially pre-numbered source data documents are used, the system should be programmed to identify and report missing or duplicate form numbers.
Forms design Pre-numbered forms sequence test Turnaround documents
Documents sent to external parties that are prepared in machine-readable form to facilitate their subsequent processing as input records. Example: the stub that is returned by a customer when paying a utility bill. Are more accurate than manually-prepared input records.
Documents that have been entered should be canceled Paper documents are stamped paid or The following source data controls regulate integrity otherwise defaced of input: A flag field is set on electronic documents. Canceling documents does not mean destroying Forms design documents. Pre-numbered forms sequence as long as needed to satisfy test They should be retained Turnaround and regulatory requirements. legal documents
Cancellation and storage of documents
Forms design Pre-numbered forms sequence test Turnaround documents Cancellation and storage of documents Authorization and segregation of duties
Source documents should be prepared only by authorized personnel acting within their authority. Employees who authorize documents should not be assigned incompatible functions.
Forms design Pre-numbered forms sequence test Turnaround documents Cancellation and storage of documents Authorization and segregation of duties Visual scanning
Documents should be scanned for reasonableness and propriety.
The following sourcedigit called a check digit can be data controls regulate integrity An additional of input: appended to account numbers, policy numbers, ID

numbers, etc. Forms design Data entry devices then perform check digit Pre-numbered forms sequence original digits in the number test verification by using the Turnaround documents check digit. to recalculate the If the and storage check digit does Cancellation recalculated of documents not match the digit recorded on the source document, that result Authorization and segregation of duties in recording or suggests that an error was made entering Visual scanning the number. Check digit verification
Forms design Pre-numbered forms sequence test Turnaround documents are replacing bar codes and manual Many businesses tags and storage of documents Cancellationwith radio frequency identification (RFID) tags that can store up to 128 bytes of data. Authorization and segregation of duties These tags should be write-protected so that Visual scanning unscrupulous customers cannot change price information on Check digit verificationmerchandise. RFID security
Once data is collected, data entry control procedures are needed to ensure that it s entered correctly. Common tests to validate input include:
Field check Determines if the characters in a field are of the proper type. Example: The characters in a social security field should all be numeric.
Field check Sign check Determines if the data in a field have the appropriate arithmetic sign. Example: The number of hours a student is enrolled in during a semester could not be a negative number.
Field check Sign check Limit check Tests whether an amount exceeds a predetermined value. Example: A university might use a limit check to make sure that the hours a student is enrolled in do not exceed 21.
Field check Sign check Limit check Range check Similar to a field check, but it checks both ends of a range. Example: Perhaps a wage rate is checked to ensure that it does not exceed $15 and is not lower than the minimum wage rate.
Field check Sign check Limit check Range check Size (or capacity) check Ensures that the data will fit into the assigned field. Example: A social security number of 10 digits would not fit in the 9-digit social security field.
Field check Sign check Limit check Range check Size (or capacity) check Completeness check Determines if all required items have been entered. Example: Has the students billing address been entered along with enrollment details?
Field check Sign check Limit check Range check Size (or capacity) check Completeness check Validity check Compares the value entered to a file of acceptable values. Example: Does the state code entered for an address match one of the 50 valid state codes?
Field check Sign check Limit check Range check Determines whether a logical relationship seems to Size (or capacity) check be correct. Completeness check A freshman with annual financial aid of Example: $60,000 is probably not reasonable. Validity check Reasonableness test
The preceding tests are used for batch processing and online real-time processing. Both processing approaches also have some additional controls that are unique to each approach.
Additional Batch Processing Data Entry Controls
In addition to the preceding controls, when using batch processing, the following data entry controls should be incorporated.
Sequence check
Tests whether the data is in the proper numerical or alphabetical sequence.
PROCESSING about data input or processing INTEGRITY Records information
errors (when they occurred, cause, when they were corrected and resubmitted). Additional Batch Processing Data Entry Errors should be investigated, corrected, and Controlsresubmitted on a timely basis (usually with the next batch) and subjected to the same input validation In addition to the preceding controls, when using routines. batch processing, the following data entry controls The log should be reviewed periodically to ensure shouldthat incorporated. corrected and then used to be all errors have been prepare an error report, summarizing errors by record Sequence error type, cause, and disposition. type, check
Error log
PROCESSING INTEGRITY records. Summarize key values for a batch of input
Commonly used batch totals include: Financial totalssums of fields that contain dollar Additional Batchsuch as total sales. Entry Processing Data values, Controls Hash totalssums of nonfinancial fields, such as the sum of all social security numbers of In addition to the preceding controls, when using employees being paid. batch processing, the followingthe number of controls Record countcount of data entry records in should be a batch. incorporated. These batch Sequence check totals are calculated and recorded when data is entered and used later to verify that all input Error was processed correctly. log
Batch totals
Additional online data entry controls
Online processing data entry controls include:
Automatic entry of data
Whenever possible, the system should automatically enter transaction data, such as next available document number or new ID number. Saves keying time and reduces errors.
Automatic entry of data Prompting
System requests each input item and waits for an acceptable response.
Automatic entry of data Prompting Pre-formatting
Fields that need to be completed are highlighted.
Automatic entry of data Prompting Pre-formatting Closed-loop verification
Checks accuracy of input data by retrieving related information. Example: When a customers account number is entered, the associated customers name is displayed on the screen so the user can verify that entries are being made for the correct account.
Maintains a detailed record of all transaction data, including: A unique transaction identifier Date and time of entry Terminal from entry controls Additionalonline data which entry is made Transmission line Online processing data entry controls include: Operator identification AutomaticSequence in which transaction is entered entry of data The Prompting log can be used to reconstruct a file that is damaged or can be used to ensure transactions are Pre-formatting or entered twice if a malfunction shuts down not lost the system. Closed-loop verification
Transaction logs
Automatic entry of data Prompting Pre-formatting Closed-loop verification Transaction logs Error messages
Should indicate when an error occurred, which item, and how it should be corrected.
Processing Controls
Processing controls to ensure that data is processed correctly include:
Data matching
Two or more items must match before processing can proceed. Example: The quantity billed on the vendor invoice must match the quantity ordered on the purchase order and the quantity received on the receiving report.
Processing Controls
Data matching File labels
External labels should be checked visually to ensure the correct and most current files are being updated. There are also two important types of internal labels to be checked. The header record, located at the beginning of each file, contains the file name, expiration date, and other identification data. The trailer record at the end of the file contains the batch totals calculated during input.
Batch totals should be recomputed as processing takes place. These totals should be compared to the totals in the trailer record. Discrepancies indicate processing errors, such as: If the recomputed record count is smaller than the original count, one or more Processing records were not processed. Controls If the recomputed record count is larger than the original, then additional unauthorized transactionsthat data is or some Processing controls to ensure were processed authorized transactions were processed twice. processed correctly include: If the discrepancy between totals is evenly divisible by 9, there probably a transposition error (two adjacent digits were was Data matching reversed). File labels
Recalculation of batch totals
Processing Controls
Data matching File labels Recalculation of batch totals Cross-footing balance test
Compares arithmetic results produced by two different methods to verify accuracy. EXAMPLE: Compute the sum of column totals in a spreadsheet and compare it to a sum of the row totals.
Processing Controls
Data matching File labels Recalculation of batch totals Cross-footing balance test Write-protection mechanisms
Protect against accidental writing over or erasing of data files but are not foolproof.
Database systems use database administrators, Processing Controls concurrent update controls to data dictionaries, and ensure processing integrity. Processing controls to ensure that data is The processed administrator establishes and enforces database. correctly include: procedures for accessing and updating the
Data The data dictionary ensures that data items are matching defined File labels and used consistently. Concurrent update controls protect records from Recalculation of batch totals being updated by two users simultaneously. Cross-footing balance test until the other has finished Locks one user out processing. Write-protection mechanisms Database processing integrity procedures
Processing Controls
Processing controls to ensure that data is When changing systems, processed correctly include: data from old files and
Data matching Conversion controls help ensure that the new data File labels media are free of errors. storage Old and of batch totals Recalculation new systems should be run in parallel at least once and results Cross-footing balance test compared to identify discrepancies. Write-protection mechanisms Internal auditors should review data conversion processes for accuracy. Database processing integrity procedures Data conversion controls
databases are entered into new data structures.
Data Transmission Controls
In addition to using encryption to protect the confidentiality of information being transmitted, organizations need controls to minimize the risk of data transmission errors. When the receiving unit detects a data transmission error, it asks the sending unit to re-send. Usually done automatically. Sometimes, the system may not be able to accomplish automatic resubmission and will ask the sender to re-transmit the data. Two basic types of data transmission controls: Parity checking Message acknowledgment techniques
Parity checking
Computers represent characters as a set of binary digits (bits). For example, 5 is represented by the seven-bit pattern 0000101. When data are transmitted some bits may be lost or received incorrectly. Two basic schemes to detect these events are referred to as even parity and odd parity. In either case, an additional bit is added to the digit being transmitted.
In even parity, the parity bit is set so that each character has an even number of bits with the value 1. In odd parity, the objective is that an odd number of bits should have the value 1. The pattern for 5 is 0000101. This pattern has two bits (an even number) with a value of 1. Therefore, the parity bit that is added would be zero if we were using even parity and 1 if we were using odd parity. The receiving device performs parity checking to verify that the proper number of bits set to one in each character received. Additional accuracy can be achieved with more complex parity schemes.
When data are transmitted, the system calculates a Message Acknowledgment Techniques in the summary statistic such as the number of bits message. A number of message acknowledgment The receiving unit performs the same calculation (an techniques can be used tothe resultsender of an unit. echo check) and sends let the to the sending electronic message know that a message was If the counts match, the transmission is presumed accurate. received:
Echo check
Message Acknowledgment Techniques
A number of message acknowledgment techniques can be used to let the sender of an electronic message know that a message was received:
Echo check Trailer record
The sending unit stores control totals in a trailer record. The receiving unit uses the information in those totals to verify the entire message was received.
Message Acknowledgment Techniques
A number of message acknowledgment techniques can be used to let the sender of an electronic message know that a message was received:
Echo check Trailer record Numbered batches
If a large message is transmitted in segments, each can be numbered sequentially. The receiving unit uses those numbers to properly assemble the segments.
Output Controls
Careful checking of system output provides additional control over processing integrity. Output controls include:
User review of output
Users carefully examine output for reasonableness, completeness, and to assure they are the intended recipient.
Output Controls
Careful checking of system output provides additional control over processing integrity. Periodically, all transactions and other system updates Output controls include: should be reconciled to control reports, file
status/update reports, User review of output or other control mechanisms. Control accounts should also be reconciled to Reconciliation procedures subsidiary account totals.
Output Controls
Careful checking of system output provides additional control over processing integrity. Output controls include:
External data reconciliation
Database totals should periodically be reconciled with data maintained of output User review outside the system. EXAMPLE: Compare number of employee records in the Reconciliationnumber in the human resources file. (Excess payroll file to procedures records in payroll suggests a ghost employee.)
AVAILABILITY
AVAILABILITY
Reliable systems are available for use whenever needed. Threats to system availability originate from many sources, including:
Hardware and software failures Natural and man-made disasters Human error Worms and viruses Denial-of-service attacks and other sabotage
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AVAILABILITY
Proper controls can minimize the risk of significant system downtime caused by the preceding threats. It is impossible to totally eliminate all threats. Consequently, organizations must develop disaster recovery and business continuity plans to enable them to quickly resume normal operations after such an event.
AVAILABILITY
Minimizing Risk of System Downtime
Loss of system availability can cause significant financial losses, especially if the system affected is essential to e-commerce. Organizations can take a variety of steps to minimize the risk of system downtime.
Physical and logical access controls (Chapter 7) can reduce the risk of successful denial-of-service attacks. Good computer security reduces risk of theft or sabotage of IS resources.
AVAILABILITY
Preventive maintenance can reduce risk of hardware and software failure. Examples:
Cleaning disk drivers Properly storing magnetic and optical media
Use of redundant components can provide fault tolerance, which enables the system to continue functioning despite failure of a component. Examples of redundant components:
Dual processors Arrays of multiple hard drives.
AVAILABILITY
Surge protection devices provide protection against temporary power fluctuations. An uninterruptible power supply (UPS) provides protection from a prolonged power outage and buys the system enough time to back up critical data and shut down safely.
AVAILABILITY
Risks associated with natural and man-made disasters can be reduced with proper location and design of rooms housing mission-critical servers and databases.
Raised floors protect from flood damage. Fire protection and suppression devices reduce likelihood of fire damage. Adequate air conditioning reduces likelihood of damage from over-heating or humidity. Cables with special plugs that cannot be easily removed reduce risk of damage due to accidentally unplugging.
AVAILABILITY
Training is especially important.
Well-trained operators are less likely to make mistakes and more able to recover if they do. Security awareness training, particularly concerning safe email and web-browsing practices, can reduce risk of virus and worm infection.
Anti-virus software should be installed, run, and kept current. Email should be scanned for viruses at both the server and desktop levels. Newly acquired software and disks, CDs, or DVDs should be scanned and tested first on a machine that is isolated from the main network.
AVAILABILITY
Disaster Recovery and Business Continuity Planning
Disaster recovery and business continuity plans are essential if an organization hopes to survive a major catastrophe. Being without an IS for even a short period of time can be quite costly some report as high as half a million dollars per hour. Yet many large U.S. companies do not have adequate disaster recovery and business continuity plans.
AVAILABILITY
The objectives of a disaster recovery and business continuity plan are to:
Minimize the extent of the disruption, damage, and loss Temporarily establish an alternative means of processing information Resume normal operations as soon as possible Train and familiarize personnel with emergency operations
AVAILABILITY
Key components of effective disaster recovery and business continuity plans include:
Data backup procedures Provisions for access to replacement infrastructure (equipment, facilities, phone lines, etc.) Thorough documentation Periodic testing Adequate insurance
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AVAILABILITY
Data Backup Procedures
Data need to be backed up regularly and frequently. A backup is an exact copy of the most current version of a database, file, or software program. It is intended for use in the event of a hardware or software failure. The process of installing the backup copy for use is called restoration.
AVAILABILITY
Several different backup procedures exist.
A full backup is an exact copy of the data recorded on another physical media (tape, magnetic disk, CD, DVD, etc.) Restoration involves bringing the backup copy online. Full backups are time consuming, so most organizations:
Do full backups weekly Supplement with daily partial backups.
AVAILABILITY
Two types of partial backups are possible:
Incremental backup
Involves copying only the data items that have changed since the last backup. Produces a set of incremental backup files, each containing the results of one days transactions. Restoration: First load the last full backup. Then install each subsequent incremental backup in the proper sequence.
AVAILABILITY
Two types of partial backups are possible:
Incremental backup Differential backup
All changes made since the last full backup are copied. Each new differential backup file contains the cumulative effects of all activity since the last full backup. Will normally take longer to do the backup than when incremental backup is used. Restoration: First load the last full backup. Then install the most recent differential backup file.
AVAILABILITY
Incremental and differential backups are both made daily.
Additional intra-day backups are often made for missioncritical databases. Periodically, the system makes a copy of the database at that point in time, called a checkpoint, and stores the copy on backup media. If a hardware or software fault interrupts processing, the checkpoint is used to restart the system. The only transactions that need to be reprocessed are those that occurred since the last checkpoint.
AVAILABILITY
Whichever backup procedure is used, multiple backup copies should be created:
One can be stored on-site for use in minor incidents. At least one additional copy should be stored offsite to be safe should a disaster occur
AVAILABILITY
The offsite copies can be transported to remote storage physically or electronically.
The same security controls should apply as to original copies.
Sensitive data should be encrypted in storage and during transmission. Access to the backup files should be carefully controlled and monitored.
AVAILABILITY
Backups are retained for only a fixed period of time. An archive is a copy of a database, master file, or software that will be retained indefinitely as an historical record, usually to satisfy legal and regulatory requirements. Multiple copies of archives should be made and stored in different locations. Appropriate security controls should also be applied to these files.
AVAILABILITY
Special attention should be paid to email, because it has become an important archive of organizational behavior and information. Access to email is often important when companies are embroiled in lawsuits. Organizations may be tempted to adopt a policy of periodically deleting all email to prevent a plaintiff s attorney from finding a smoking gun.
AVAILABILITY
Most experts advise against such policies and recommend that organizations include email in their backup and archive procedures because:
There are likely to be copies of the email stored in locations outside the organization. Such a policy would mean that the organization would not be able to tell its side of the story. Also, courts have sanctioned companies for failing to provide timely access to email.
AVAILABILITY
AVAILABILITY
Infrastructure Replacement
Major disasters can totally destroy an organization s information processing center or make it inaccessible. A key component of disaster recovery and business continuity plans incorporates provisions for replacing the necessary computing infrastructure, including:
Computers Network equipment and access Telephone lines Office equipment Supplies
It may even be necessary to hire temporary staff.
The least expensive approach. The organization enters into an agreement with another organization that uses similar equipment to have temporary access to and use of their information system resources in the event of a disaster. Effective solutions for disasters of limited duration and magnitude, especially for small organizations. Not optimal in major disasters as: The host organization may also be affected. The host also needs the resources.
AVAILABILITY
Organizations have three basic options for replacing computer and networking equipment.
Reciprocal agreements
AVAILABILITY
Reciprocal agreements Cold sites
An empty building is purchased or leased and pre-wired for necessary telephone and Internet access. Contracts are created with vendors to provide all necessary computer and office equipment within a specified period of time. Still leaves the organization without use of the IS for a period of time.
AVAILABILITY
Most expensive solution but used by organizations like financial institutions and airlines which cannot survive any appreciable time without there IS. The hot site is a facility that is pre-wired for phone and Internet (like the cold site) but also contains the essential computing and office Reciprocal agreements equipment. It is a backup infrastructure designed to provide fault tolerance in Cold a major the event ofsites disaster.
Hot sites
AVAILABILITY
AVAILABILITY
Documentation
An important and often overlooked component. Should include:
The disaster recovery plan itself, including instructions for notifying appropriate staff and the steps to resume operation, needs to be well documented. Assignment of responsibility for the various activities. Vendor documentation of hardware and software. Documentation of modifications made to the default configuration (so replacement will have the same functionality). Detailed operating instructions.
Copies of all documentation should be stored both on-site and off-site.
AVAILABILITY
AVAILABILITY
Testing
Periodic testing and revision is probably the most important component of effective disaster recovery and business continuity plans.
Most plans fail their initial test, because it s impossible to anticipate everything that could go wrong. The time to discover these problems is before the actual emergency and in a setting where the weaknesses can be carefully analyzed and appropriate changes made.
AVAILABILITY
Plans should be tested on at least an annual basis to ensure they reflect recent changes in equipment and procedures.
Important to test procedures involved in executing reciprocal agreements or hot or cold sites. Backup restoration procedures also require practice.
AVAILABILITY
Brainstorming sessions involving mock scenarios can be effective in identifying gaps and shortcomings.
More realistic and detailed simulations or drills should also be performed, although not to the expense of completely performing every activity. Experts recommend testing individual components of the plans separately, because it is too difficult and costly to simulate and analyze every aspect simultaneously.
The plan documentation needs to be updated to reflect any changes in procedure made in response to problems identified during testing.
AVAILABILITY
AVAILABILITY
Insurance
Organizations should acquire adequate insurance coverage to defray part or all of the expenses associated with implementing their disaster recovery and business continuity plans.
CHANGE MANAGEMENT CONTROLS

Organizations constantly modify their information systems to reflect new business practices and to take advantage of advances in IT. Controls are needed to ensure such changes don t negatively impact reliability. Existing controls related to security, confidentiality, privacy, processing integrity, and availability should be modified to maintain their effectiveness after the change. Change management controls need to ensure adequate segregation of duties is maintained in light of the modifications to the organizational structure and adoption of new software.

Important change management controls include:
All change requests should be documented in a standard format that identifies:
Nature of the change Reason for the change Date of the request
All changes should be approved by appropriate levels of management.

Approvals should be clearly documented to provide an audit trail. Management should consult with the CSO and other IT managers about impact of the change on reliability.

Changes should be thoroughly tested prior to implementation.
Includes assessing effect of change on all five principles of systems reliability. Should occur in a separate, non-production environment.
All documentation (program instructions, system descriptions, backup and disaster recovery plans) should be updated to reflect authorized changes to the system. Emergency changes or deviations from policy must be documented and subjected to a formal review and approval process as soon after implementation as practicable. All such actions should be logged to provide an audit trail.

Backout plans should be developed for reverting to the previous configuration if the approved changes need to be interrupted or aborted. User rights and privileges should be carefully monitored during the change process to ensure proper segregation of duties.

The most important change management control is adequate monitoring and review by top management to ensure that the changes are consistent with the entity s multiyear strategic plan. Objective: Be sure the system continues to effectively support the organization s strategy. Steering committees are often created to perform this function.
SUMMARY
In this chapter, you ve learned about the controls used to protect the confidentiality of sensitive information and the controls used to protect the privacy of customer information. You ve also learned about controls that help ensure processing integrity. Finally, you ve learned about controls to ensure that the system is available when needed.

Information Systems Controls For System Reliability

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CHAPTER 8

y Reliable systems protect confidential information from unauthorized disclosure.

Cancellation and storage of documents

PROCESSING about data input or processing INTEGRITY Records information

PROCESSING INTEGRITY records. Summarize key values for a batch of input

Recalculation of batch totals

External data reconciliation

It may even be necessary to hire temporary staff.

Copies of all documentation should be stored both on-site and off-site.

CHANGE MANAGEMENT CONTROLS

CHANGE MANAGEMENT CONTROLS

All changes should be approved by appropriate levels of management.

CHANGE MANAGEMENT CONTROLS

CHANGE MANAGEMENT CONTROLS

CHANGE MANAGEMENT CONTROLS

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